6-K - GHG - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

December 2022

Commission File Number: 001-38425

GreenTree Hospitality Group Ltd.

(Registrant’s name)

1228 Zhongshan North Road, Putuo District

Shanghai 200065

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) : ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) : ¨

EXHIBIT INDEX

Exhibit No.	Description
99.1	GreenTree Hospitality Group Ltd. Reports First Half 2022 Financial Results

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GREEN TREE HOSPITALITY GROUP LTD .
By:	/s/ Alex S. Xu
Name:	Alex S. Xu
Title:	Chairman and Chief Executive Officer

Date: December 28, 2022

Exhibit 99.1

GreenTree Hospitality Group Ltd. Reports FirstHalf 2022 Financial Results

·	Totalrevenues decreased by 22.3% year over year to RMB457.4 million (US$68.3 million) ^[1]^.
·	Adjusted EBITDA (non-GAAP)^[2]^ decreasedby 46.8% year over year to RMB93.3 million (US$13.9 million)^[1]^.
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·	Core net income (non-GAAP) ^[3]^ decreasedby 13.7% year over year to RMB105.9 million (US$15.8 million) ^[1]^.
---	---

SHANGHAI, December 27, 2022 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality management group in China, today announced its unaudited financial results for the first half of 2022.

First Half 2022 Operational Highlights

·	A<br>total of 4,669 hotels with 332,073 hotel rooms were in operation as of June 30, 2022, compared to 4,542 hotels and 328,773 hotel rooms<br>as of June 30, 2021.
·	As<br>of June 30, 2022, the Company had 67 leased-and-operated ("L&O") hotels and 4,602 franchised-and-managed ("F&M")<br>hotels in operation in 367 cities across China, compared to 63 L&O hotels and 4,479 F&M hotels in operation in 358 cities as<br>of June 30, 2021. Geographic coverage increased by 2.5% year-over-year.
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·	During the first half of 2022, the Company opened<br>201 hotels, a decrease of 201 compared to 402 hotels opened in the first half of 2021. Of the hotels opened in the first half of 2022,<br>43 were in the mid-to-up-scale segment, 108 in the mid-scale segment, and 50 in the economy segment. Geographically, 13 hotels were in<br>Tier 1 cities^[4]^, 52 in Tier 2 cities and the remaining 136 in Tier 3 and lower cities in China as of June 30, 2022.
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·	As<br>of June 30, 2022, the Company had a pipeline of 1,094 hotels contracted for or under development with 296 in the mid-to-up-scale segment,<br>469 in the mid-scale segment, and 324 in the economy segment.
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1 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 6.6981 on June 30, 2022 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/

2 Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, other general expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and the provision for bad debts, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition.

3 Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense and impairment charges and provisions for other assets but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax).

4 Tier 1 Cities refers to Beijing, Shanghai, Shenzhen and Guangzhou; Tier 2 Cities refers to the 32 major cities, other than Tier 1 Cities, including provincial capitals, administrative capitals of autonomous regions, direct-controlled municipalities and other major cities designated as municipalities with independent planning by the State Council.

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·	The<br> average daily room rate, or ADR, for all hotels in operation was RMB153 in the first quarter<br> of 2022, an increase of 1.6% from RMB151 in the first quarter of 2021. Such ADR was RMB147<br> in the second quarter of 2022, a 14.0% year-over-year decrease.
·	The<br> occupancy rate, or OCC, for all hotels in operation was 60.0% in the first quarter of 2022,<br> down from 63.4 % in the first quarter of 2021. Such OCC was 62.2% in the second quarter of<br> 2022, compared with 78.6% in the second quarter of 2021.
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·	The<br> revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR<br> by its occupancy rate, was RMB92 in the first quarter of 2022, a 3.9% year-over-year decrease.<br> RevPAR was RMB91 in the second quarter of 2022, a 31.9% year-over-year decrease.
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·	As<br> of June 30, 2022 the Company's loyalty program had over 74 million individual members and<br> approximately 1,905,000 corporate members, compared to over 69 million individual members<br> and approximately 1,850,000 corporate members, respectively, as of December 31, 2021.
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"The first half of 2022 was extremely challenging as COVID-19 outbreaks in many parts of the country resulted in lockdowns in many cities, especially in Shanghai. Nevertheless, we continued to execute our long-term strategic growth plan to deliver continued operating profitability, maintain healthy and stable cash flow, open L&O hotels in new strategic locations, and assist franchisees in maintaining quality operations," said Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree.

Our performance in January and February, especially during Chinese New Year, was better than our industry's average, creating growing momentum in our business. However, outbreaks in the second quarter slowed down the pace of recovery throughout our industry, especially in top-tier cities such as Guangzhou and Shanghai.

As we entered summer and transportation restrictions were relaxed, RevPAR recovered. In the third quarter, it reached nearly 80% of the same period in 2019. October and November brought a fresh wave of outbreaks, slowing down our recovery once again. However, with flexible anti-pandemic measures released by the government early December, RevPAR recovered this month to more than 85% of its pre-pandemic levels.

The pandemic is evolving rapidly in China and it is unclear at this stage what impact this will have on our business in the short term as many people currently prefer to act cautiously and limit their travels. Looking into the first quarter of 2023, with Chinese New Year late January, and the months beyond, we expect that the country will gradually return to normal life. To prepare for these better days, we are helping our hotels and franchisees to devise and implement stringent measures to ensure the safety of our guests and training staff at all levels to be fully ready for the expected recovery in leisure and business travel.

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As we are closing another very difficult year, I want to give a special thanks to our team, franchisees, and partners for their hard work in protecting the health of our guests and supporting each other through very challenging times.

FirstHalf 2022 Financial Results

	Six<br> months Ended
	June<br> 30, 2021		June<br> 30, 2022		June<br> 30, 2022
	RMB		RMB		US
Revenues
Leased-and-operated<br> hotels		172,995,482		171,272,365
Franchised-and-managed hotels		395,606,563		275,539,547
others		19,667,293		10,564,787
Total<br> revenues		588,269,338		457,376,699

All values are in US Dollars.

Totalrevenuesfor the first half of 2022 were RMB457.4 million (US$ 68.3 million)^[1]^, a 22.3% year-over-year decrease. The decrease was primarily due to the impact of COVID-19, which resulted in lower RevPAR at L&O hotels and F&M hotels. Compared with the first half of 2019, before the COVID-19 outbreak, total revenues for the first half of 2022 decreased by 10.4%.

Totalrevenues from leased-and-operated hotelsfor the first half of 2022 were RMB171.3 million (US$25.6 million)^[1]^, a 1.0% year-over-year decrease. The decrease was primarily due to a 22.6% year-over-year decrease in L&O hotels’ second quarter RevPAR and was partially offset by a 10.3% year-over-year increase in L&O hotels’ first quarter RevPAR and the increased number of newly opened L&O hotels.

Totalrevenues from franchised-and-managed hotelsfor the first half of 2022 were RMB275.5 million (US$41.1 million)^[1]^, a 30.4% year-over-year decrease. Initial franchise fees for the first half of 2022 decreased 33.6% year-over-year, mainly because of the decrease in the gross opening number of F&M hotels. Recurring franchisee management fees and others for the first half of 2022 decreased by 30.0% year-over-year, primarily due to a 4.3% decrease in F&M hotels’ RevPAR for 2022 Q1 and a 32.4% decrease in F&M hotels’ RevPAR for 2022 Q2 due to the impact of COVID-19 and the fee waivers to franchisees of quarantined hotels and hotels whose RevPAR was severely affected by the pandemic.

	Six<br> Months Ended
	June<br> 30, 2021		June<br> 30, 2022		June<br> 30, 2022
	RMB		RMB		US
Initial franchise<br> fee		37,592,607		24,955,708
Recurring<br> franchise management fee and others		358,013,956		250,583,839
Revenues<br> from franchised-and-managed hotels		395,606,563		275,539,547

All values are in US Dollars.

Totaloperating costs and expenses

	Six<br> Months Ended
	June<br> 30, 2021		June<br> 30, 2022		June<br> 30, 2022
	RMB		RMB		US
Operating costs and expenses
Hotel operating<br> costs		286,667,300		307,750,028
Selling and marketing expenses		39,821,421		18,852,606
General and administrative expenses		127,001,827		99,724,402
Other operating<br> expenses		4,146,290		2,048,734
Other general<br> expenses		-		490,619,710
Total<br> operating costs and expenses		457,636,838		918,995,480

All values are in US Dollars.

Hoteloperating costsfor the first half of 2022 were RMB 307.8 million (US$45.9 million)^[1]^, a 7.4% year-over-year increase. The increase was mainly attributable to the opening of 34 L&O hotels since the beginning of 2021, which resulted in higher rents, higher utilities, higher staff headcount and compensation expenses, higher depreciation and amortization. Excluding the impact from newly opened L&O hotels since 2021, hotel operating costs for the first half of 2022 decreased 14.1%.

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	Six<br> Months Ended
	June<br> 30, 2021		June<br> 30, 2022		June<br> 30, 2022
	RMB		RMB		US
Rental		103,794,352		107,078,975
Utilities		12,203,535		13,659,704
Personnel cost		31,071,099		41,703,184
Depreciation and amortization		33,683,464		52,000,772
Consumable, food and beverage		31,726,274		24,266,539
Costs of general managers of<br> franchised-and-managed hotels		55,395,961		56,294,805
Other costs of franchised-and-managed<br> hotels		12,448,949		7,163,562
Others		6,343,666		5,582,487
Hotel<br> Operating Costs		286,667,300		307,750,028

All values are in US Dollars.

Sellingand marketing expenses for the first half of 2022 were RMB18.9 million (US$2.8 million)^[1]^, a 52.7% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses and staff related expenses, due to less employee business travels in the pandemic.

Generaland administrative expensesfor the first half of 2022 were RMB99.7 million (US$14.9 million) ^[1]^, a 21.5% year-over-year decrease. The decrease was mainly attributable to the reduction of travel expenses and consulting fees.

Othergeneral expenses were RMB490.6 million (US$73.2 million)^[1]^ in the first half of 2022, which included one-time impairment charges for Argyle and Urban as mentioned earlier. After certain assessment, GreenTree's board of directors concluded that the Company would deconsolidate Argyle starting from June, 2022. As for Urban, GreenTree has sold its equity interest and will deconsolidate Urban in the fourth quarter. In addition to the one-time impairments, we also took a provision for other assets related to two properties. In the first quarter of 2021, we signed Lease Contracts and Purchase Intention Contracts with Shanghai HongYuan Shengshi for two properties located in the Hongqiao Business Center, where we planned to develop flagship L&O hotels and the company’s new headquarters. However, because of the financial crisis of Evergrande, one of its shareholders, neither property had been delivered on time as contracted as of June 30, 2022. Therefore, we decided to take a full provision at this time out of an abundance of caution.

Grossprofit for the first half of 2022 was RMB149.6 million (US$22.3 million)^[1]^, a year-over-year decrease of 50.4%. Gross margin for the first half of 2022 was 32.7%, compared to 51.3% a year ago. The decrease was primarily due to the operating loss recorded by newly opened L&O hotels and lower revenue caused by Covid-19.

Incomefrom operations for the first half of 2022 was RMB-457.7 million (US$-68.3 million)^[1]^, a year-over-year decrease of 403.7%, with a margin of -100.1%. Excluding other general expenses, income from operation from purely operating activities was RMB 32.9 million, with a margin of 7.2%.

Netincome for the first half of 2022 was RMB-360.9 million (US$-53.9million) ^[1]^, compared to RMB146.3 million in the first half of 2021 and net margin was -78.9%. The year-over-year decrease was mainly attributable to other general expenses. Excluding these, net income was 68.3 million RMB, with a margin of 14.9%.

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AdjustedEBITDA (non-GAAP)^[2]^ **** for the first half of 2022 was RMB93.3 million (US$13.9 million) ^[1]^, a year-over-year decrease of 46.8%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, for the first half of 2022 was 20.4%, compared to 29.8% a year ago. The decrease was mainly attributable to the increased number of L&O hotels—both newly opened and in the pipeline. Excluding the impact of newly opened and pipeline hotels, adjusted EBITDA (non-GAAP) for the first half of 2022 was RMB139.3 million, with a margin of 34.9%.

Corenet income (non-GAAP) for the first half of 2022 was RMB105.9 million (US$15.8 million) ^[1]^, a year-over-year decrease of 13.7%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the first half of 2022 was 23.2%, compared to 20.9% one year ago. Excluding the impact of newly opened hotels, core net income (non-GAAP) was RMB163.9 million, with a margin of 41.1%.

**Earningsper ADS (basic and diluted)**for the first half of 2022 were RMB-3.18 (US$-0.47) ^[1]^, down from RMB1.47 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the first half of 2022 was RMB1.03 (US$0.15)^[1]^, down from RMB1.19 a year ago.

CashflowOperating cash inflow for the first half of 2022 was RMB 130.7 million (US$ 19.5 million)^[1]^ as a result of income from operations. Investing cash inflow for the first half of 2022 was RMB 322.6 million (US$48.2 million) ^[1]^, which was primarily attributable to proceeds from short-term investments and proceeds from the disposal of security equities. The investing cash inflow was partially offset by a loan to an affiliated food and restaurant business which is to be merged with the Company in January 2023. Financing cash outflow for the first half of 2022 was RMB181.6 million (US$27.1 million)^[1]^, mainly attributable to the repayment of bank loans by the end of the June 30, 2022.

Cashand cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposit. As of June 30, 2022, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,079.5 million (US$161.17 million) ^[1]^, compared to RMB1,235.9 million as of December 31, 2021. The decrease from the end of 2021 was primarily attributable to the repayment of bank loans and a loan to an affiliated food and restaurant business which is to be merged with the Company in January 2023, offset by cash from operating activities.

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KeyQ3 2022 Operational Highlights

·	A<br> total of 4,763 hotels with 337,111 hotel rooms were in operation as of September 30, 2022.
·	As<br> of September 30, 2022, the Company had 69 leased-and-operated ("L&O") hotels and 4,694<br> franchised-and-managed ("F&M") hotels in operation in 370 cities across China.
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·	During<br> the third quarter of 2022, the Company opened 104 hotels.
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·	As<br> of September 30, 2022, the Company had a pipeline of 1,129 hotels contracted for or under<br> development.
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·	ADR,<br> for all hotels in operation was RMB168.
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·	OCC,<br> for all hotels in operation was 71.1%.
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·	RevPAR<br> was RMB120.
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Updateon the Food and Restaurant Acquisition

Since the announcement of the signing of the SPA in May 2022, the Company has been working on the closing of the Food and Restaurant Acquisition transaction. However, due to resurgences of COVID-19, it experienced significant delays in the delivery of various documents to various agencies. While China removed many COVID-related restrictions in December and the Company is speeding up the closing process, it expects the formal closing will be completed in January 2023, a bit later than originally planned. The Company will inform the market when the transaction formally closes.

Guidance

Given the large number of Covid outbreaks in many parts of China throughout 2022, business did not improve as we initially expected, until the easing of restrictions early December. Consequently, we have adjusted our revenue guidance for the full year of 2022 to 81%-84% of the 2021 levels.

The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods and the full year.

ConferenceCall

GreenTree's management will hold an earnings conference call at 8:00 PM U.S. Eastern Time on December 27, 2022, (9:00 AM Beijing/Hong Kong Time on December 28, 2022).

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Dial-in numbers for the live conference call are as follows:

International	1-412-902-4272
Mainland<br> China	4001-201-203
US	1-888-346-8982
Hong<br> Kong	800-905-945<br> or 852-3018-4992
Singapore	800-120-6157

Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.

A telephone replay of the conference call will be available after the conclusion of the live conference call until January 3, 2023.

Dial-in numbers for the replay are as follows:

International<br> Dial-in	1-412-317-0088
U.S.<br> Toll Free	1-877-344-7529
Canada<br> Toll Free	855-669-9658
Passcode:	5371493

Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.

Useof Non-GAAP Financial Measures

We believe that Adjusted EBITDA and core net income, as we present it, is a useful financial metric to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income does not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investees, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

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The term Adjusted EBITDA and core net income is not defined under U.S. GAAP, and Adjusted EBITDA and core net income is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

AboutGreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading hospitality management group in China. As of December 31, 2021, GreenTree had a total number of 4,659 hotels. In 2021, HOTELS magazine ranked GreenTree Top 11 Ranking among 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was also the fourth largest hospitality company in China in 2021 based on the statistics issued by the China Hospitality Association.

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, and up-scale segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, superior system management with moderate charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

For more information on GreenTree, please visit http://ir.998.com

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Safe HarborStatements

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

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Financial Tables and Operational Data Follow

GreenTreeHospitality Group Ltd.

UnauditedCondensed Consolidated Balance Sheets

	December<br> 31, 2021		June<br> 30, 2022			June<br> 30, 2022
	RMB		RMB			US
ASSETS
Current assets:
Cash and cash equivalents		298,428,709		574,005,663
Restricted cash		3,300,000		-
Short-term investments		557,458,675		246,841,572
Investments in equity securities		157,988,851		70,918,733
Accounts receivable, net of allowance		95,589,936		113,214,510
Amounts due from related parties		310,419,860		433,819,663
Prepaid rent		15,454,967		10,900,885
Inventories		2,297,584		2,103,699
Other current assets		142,737,163		98,889,940
Loans receivable,<br> net		247,530,580		216,342,526
Total current assets		1,831,206,325		1,767,037,191
Non-current assets:
Restricted cash		18,869,900		18,869,900
Long-term time deposits		160,000,000		130,000,000
Loans receivable, net		290,967,680		192,016,112
Property and equipment, net		1,045,356,265		976,142,618
Intangible assets, net		520,117,479		272,970,807
Goodwill		120,819,948		29,583,468
Long-term investments		188,790,785		229,377,915
Other assets		329,366,340		128,198,175
Deferred<br> tax assets		161,565,839		213,786,784
TOTAL<br> ASSETS		4,667,060,561		3,957,982,970
LIABILITIES AND EQUITY
Current liabilities:
Short-term bank loans		356,000,000		254,800,000
Long-term bank loans, current<br> portion		50,200,000		141,900,000
Accounts payable		24,036,544		21,212,226
Advance from customers		39,773,738		27,111,499
Amounts due to related parties		9,530,627		10,455,346
Salary and welfare payable		60,154,565		63,897,463
Deferred rent		1,926,957		2,127,896
Deferred revenue		215,147,975		196,743,088
Accrued expenses and other current<br> liabilities		381,282,062		413,506,904
Income tax payable		70,897,366		20,730,866
Dividends<br> payable		40,999,458		-
Total current liabilities		1,249,949,292		1,152,485,288
Long-term loans, non-current<br> portion		301,800,000		170,000,000
Deferred rent		68,842,692		79,948,490
Deferred revenue		314,472,488		264,055,000
Other long-term liabilities		132,046,925		125,722,275
Deferred tax liabilities		228,201,745		166,657,718
Unrecognized<br> tax benefits		328,820,281		366,212,130
TOTAL<br> LIABILITIES		2,624,133,423		2,325,080,901
Shareholders’ equity:
Class A ordinary shares		222,587,070		222,587,070
Class B ordinary shares		115,534,210		115,534,210
Additional paid-in capital		1,151,384,306		1,151,655,445
Retained earnings (Accumulated<br> losses)		326,298,618		(1,332,875	)		)
Accumulated<br> other comprehensive income		41,880,907		32,150,906
Total GreenTree Hospitality<br> Group Ltd. shareholders’ equity		1,857,685,111		1,520,594,756
Non-controlling<br> interests		185,242,027		112,307,313
Total<br> shareholders’ equity		2,042,927,138		1,632,902,069
TOTAL<br> LIABILITIES AND SHAREHOLDERS’ EQUITY		4,667,060,561		3,957,982,970

All values are in US Dollars.

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GreenTreeHospitality Group Ltd.

UnauditedCondensed Consolidated Statements of Comprehensive Income

	Six<br> Months Ended
	June<br> 30, 2021			June<br> 30, 2022			June<br> 30, 2022
	RMB			RMB			US
Revenues
Leased-and-operated<br> hotels		172,995,482			171,272,365
Franchised-and-managed hotels		395,606,563			275,539,547
Others		19,667,293			10,564,787
Total revenues		588,269,338			457,376,699
Operating costs and expenses
Hotel operating costs		(286,667,300	)		(307,750,028	)		)
Selling and marketing expenses		(39,821,421	)		(18,852,606	)		)
General and administrative expenses		(127,001,827	)		(99,724,402	)		)
Other operating expenses		(4,146,290	)		(2,048,734	)		)
Other general<br> expenses		-			(490,619,710	)		)
Total operating costs and<br> expenses		(457,636,838	)		(918,995,480	)		)
Other operating<br> income		20,053,589			3,917,398
Income (loss) from operations		150,686,089			(457,701,383	)		)
Interest income and other, net		29,282,647			23,730,138
Interest expense		(7,477,925	)		(15,178,612	)		)
Gains from investment in equity<br> securities		43,873,336			21,687,584
Other income, net		-			14,664,617
Income (loss) before income<br> taxes		216,364,147			(412,797,656	)		)
Income<br> tax (expense) benefits		(70,539,794	)		51,800,695
Income (loss) before share<br> of gains in equity investees		145,824,353			(360,996,961	)		)
Share of<br> gains in equity investees, net of tax		463,897			75,125
Net income (loss)		146,288,250			(360,921,836	)		)
Net loss<br> attributable to non-controlling interests		4,939,732			33,290,344
Net<br> income (loss) attributable to ordinary shareholders		151,227,982			(327,631,492	)		)
Net earnings (losses) per<br> share
Class A ordinary share-basic<br> and diluted		1.47			(3.18	)		)
Class B ordinary share-basic<br> and diluted		1.47			(3.18	)		)
Net earnings (losses) per<br> ADS
Class A ordinary share-basic<br> and diluted		1.47			(3.18	)		)
Class B ordinary share-basic<br> and diluted		1.47			(3.18	)		)
Weighted average shares<br> outstanding
Class A ordinary share-basic<br> and diluted		68,286,954			68,286,954
Class B ordinary share-basic<br> and diluted		34,762,909			34,762,909
Other comprehensive income<br> (loss), net of tax
Foreign currency translation<br> adjustments		(1,373,712	)		(9,730,001	)		)
Comprehensive income (loss),<br> net of tax		144,914,538			(370,651,837	)		)
Comprehensive<br> loss/(income) attributable to non-controlling interests		4,939,732			33,290,344
Comprehensive<br> income (loss) attributable to ordinary shareholders		149,854,270			(337,361,493	)		)

All values are in US Dollars.

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GreenTreeHospitality Group Ltd.

UnauditedCondensed Consolidated Statements of Cash Flows

	Six<br> Months Ended
	June<br> 30, 2021			June<br> 30, 2022			June<br> 30, 2022
	RMB			RMB			US
Operating activities:
Net income (loss)		146,288,250			(360,921,836	)		)
Adjustments to reconcile<br> net income to net cash provided by operating activities:
Depreciation and amortization		40,437,845			62,246,827
Share of gains in equity method<br> investments		(463,897	)		(75,125	)		)
Fair value change in returnable<br> consideration and contingent consideration, net		(502,712	)		-
Impairment of long-lived assets		-			56,212,849
Impairment of goodwill		-			91,236,480
Losses from disposal of a subsidiary		-			13,944,925
Interest income		(3,855,030	)		(262,334	)		)
Bad debt expense		20,461,144			340,489,881
Gains from investments in equity<br> securities		(43,873,336	)		(21,687,584	)		)
Losses on disposal of property<br> and equipment		-			2,566,292
Foreign exchange losses(gains)		2,507,642			(11,937,001	)		)
Share-based compensation		1,307,865			271,139
Changes in operating assets<br> and liabilities:
Accounts receivable		(32,846,596	)		(29,431,182	)		)
Prepaid rent		(14,196,968	)		4,554,082
Inventories		1,680,444			(75,498	)		)
Amounts due from related parties		(3,873,538	)		(2,852,920	)		)
Other current assets		(123,719,995	)		10,112,055
Other assets		(7,784,920	)		6,868,854
Accounts payable		(1,514,213	)		455,144
Amounts due to related parties		2,157,658			924,719
Salary and welfare payable		5,269,370			4,587,762
Deferred revenue		(24,203,226	)		(47,014,645	)		)
Advance from customers		(6,444,631	)		(11,146,437	)		)
Accrued expenses and other current<br> liabilities		52,388,512			84,240,136
Income tax payable		(36,042,356	)		(51,560,123	)		)
Unrecognized tax benefits		21,399,858			37,391,849
Deferred rent		15,403,018			14,340,487
Other long-term liabilities		14,233,448			(6,624,650	)		)
Deferred<br> taxes		18,689,560			(56,139,972	)		)
Net cash<br> provided by operating activities		42,903,196			130,714,174
Investing activities:
Purchases of property and equipment		(157,888,825	)		(28,834,339	)		)
Purchases of intangible assets		-			(60,215	)		)
Payments for acquisition of minority<br> equity		(868,388	)		-
Acquisitions, net of cash received		(173,128,625	)		-
Collection of acquisition advances		10,148,000			-
Advances for purchases of property<br> and equipment		(204,889,383	)		-
Purchases of short-term investments		(138,286,310	)		(48,860,000	)		)
Proceeds from short-term investments		356,735,030			389,739,437
Proceeds from sales of long-term<br> time deposits		50,000,000			-
Increase of long-term time deposits		(130,000,000	)		-
Proceeds from disposal of equity<br> securities and dividends received from equity securities		211,307,112			116,555,911
Loans to related parties		(231,745,560	)		(165,320,000	)		)
Repayment from related parties		148,665,500			45,607,667
Loans to third parties		(10,500,000	)		(266,200	)		)
Repayment from third parties		46,500,000			1,638,833
Loan to franchisees		(460,435,294	)		(35,281,960	)		)
Repayment<br> from franchisees		183,674,199			47,680,868
Net<br> cash (used in) provided by investing activities		(500,712,544	)		322,600,002
Financing activities:
Distribution to the shareholders		-			(40,999,458	)		)
Loan from non-controlling interest		2,792,853			300,000
Repayment of bank loans		-			(156,100,000	)		)
Proceeds from bank loans		140,000,000			14,800,000
Capital<br> contribution from non-controlling interest holders		7,031,000			400,000
Net<br> cash provided by (used in) financing activities		149,823,853			(181,599,458	)		)
Effect of<br> exchange rate changes on cash and cash equivalents and restricted cash		(1,395,088	)		562,236
Net (decrease) increase<br> in cash and cash equivalents and restricted cash		(309,380,583	)		272,276,954
Cash and<br> cash equivalents and restricted cash at the beginning of the period		633,728,109			320,598,609
Cash<br> and cash equivalents and restricted cash at the end of the period		324,347,526			592,875,563

All values are in US Dollars.

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GreenTreeHospitality Group Ltd.

UnauditedReconciliation of GAAP and Non-GAAP Results

	Six<br> Months Ended
	June<br> 30, 2021		June<br> 30, 2022			June<br> 30, 2022
	RMB		RMB			US
Net income<br> (loss)		146,288,250		(360,921,836	)		)
Deduct:
Other operating income		20,053,589		3,917,398
Interest income and other, net		29,282,647		23,730,138
Gains from investment in equity<br> securities		43,873,336		21,687,584
Share of gain in equity investees,<br> net of tax		463,897		75,125
Other income, net		-		14,664,617
Add:
Other operating expenses		4,146,290		2,048,734
Other general expenses		-		490,619,710
Income tax expenses (benefits)		70,539,794		(51,800,695	)		)
Interest expenses		7,477,925		15,178,612
Depreciation and amortization		40,437,845		62,246,827
Adjusted EBITDA (Non-GAAP)		175,216,635		93,296,490

All values are in US Dollars.

	Six<br> Months Ended
	June<br> 30, 2021		June<br> 30, 2022			June<br> 30, 2022
	RMB		RMB			US
Net income<br> (loss)		146,288,250		(360,921,836	)		)
Deduct:
Government subsidies (net of<br> 25% tax)		11,134,872		1,251,065
Gains from investment in equity<br> securities (net of 25% tax)		32,905,002		16,265,688
Other income (net of 25% tax)		-		10,998,463
Add:
Share-based compensation		1,307,865		271,139
One-time fees and expenses		14,707,304		4,467,926
Impairment charges and provisions<br> for other assets		4,523,574		490,619,710
Core net income (Non-GAAP)		122,787,119		105,921,723
Core net income per ADS<br> (Non-GAAP)
Class A ordinary share-basic<br> and diluted		1.19		1.03
Class B ordinary share-basic<br> and diluted		1.19		1.03

All values are in US Dollars.

13 / 16

Operational Data

	June<br> 30, 2021		June<br> 30, 2022
Total hotels<br> in operation:		4,542		4,669
Leased<br> and owned hotels		63		67
Franchised<br> hotels		4,479		4,602
Total hotel rooms in operation		328,773		332,073
Leased<br> and owned hotels		7,229		6,986
Franchised<br> hotels		321,544		325,087
Number of cities		358		367
	Quarter<br> Ended
---	---	---	---	---	---	---
	2021<br> Q1			2022Q1
Occupancy rate (as a percentage)
Leased-and-owned<br> hotels		51.7	%		52.6	%
Franchised<br> hotels		63.7	%		60.2	%
Blended		63.4	%		60.0	%
Average daily rate (in<br> RMB)
Leased-and-owned<br> hotels		184			199
Franchised<br> hotels		150			152
Blended		151			153
RevPAR (in RMB)
Leased-and-owned<br> hotels		95			105
Franchised<br> hotels		96			91
Blended		96			92

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	Quarter<br> Ended
	2021<br> Q2			2022Q2
Occupancy rate (as a percentage)
Leased-and-owned<br> hotels		72.9	%		57.1	%
Franchised<br> hotels		78.8	%		62.3	%
Blended		78.6	%		62.2	%
Average daily rate (in<br> RMB)
Leased-and-owned<br> hotels		219			217
Franchised<br> hotels		169			145
Blended		171			147
RevPAR (in RMB)
Leased-and-owned<br> hotels		160			124
Franchised<br> hotels		133			90
Blended		134			91
	Number<br> of Hotels in Operation				Number<br> of Hotel Rooms in Operation
---	---	---	---	---	---	---	---	---
	June<br> 30, 2021		June<br> 30, 2022		June<br> 30, 2021		June<br> 30, 2022
Luxury		28		-		5,821		-
Argyle		28		-		5,821		-
Mid-to-up-scale		423		528		38,704		47,347
GreenTree<br> Eastern		170		201		18,155		22,402
Deepsleep<br> Hotel		5		7		356		467
Gem		39		52		3,605		4,728
Gya		50		66		4,212		5,639
Vx		52		81		4,520		7,069
Ausotel		14		-		1,877		-
Urban<br> Garden and others		93		121		5,979		7,042
Mid-scale		2,917		2,999		231,105		233,950
GreenTree<br> Inn		2,158		2,183		179,790		180,255
GT<br> Alliance		508		521		35,937		37,545
GreenTree<br> Apartment		15		19		1,058		1,260
Vatica		115		110		8,386		7,969
City<br> 118 Selected and others		121		166		5,934		6,921
Economy<br> hotels		1,174		1,142		53,143		50,776
Shell		617		648		26,714		28,030
City<br> 118 and others		557		494		26,429		22,746
Total		4,542		4,669		328,773		332,073